Utility Regulation

Regulatory Reform: The Base Load Review Act and Regulatory Agencies

The flaws in South Carolina's system for the regulation of monopoly utilities became very clear as the V. C. Summer Nuclear Plants No. 2 and 3 Project delays and eventually abandonment led the state into one of the worst economic disasters in its history. LWVSC recognized the oncoming disaster in 2015 and began work then to attempt to influence legislation shaping utility regulation.

Our work is grounded in two aspects of our agenda of Making Democracy Work:

The LWVSC supports the "development and monitoring of governmental structures, processes, and procedures that ensure efficient, representative, responsive, transparent and accountable state and local government and citizen access to, and participation in, decision-making." Our regulatory system clearly failed to meet that standard.

The influence of money in politics can be a significant problem in utility regulation. The free flow of money to decision-makers through income, gifts, and donations tends to foster what economists call "regulatory capture," which occurs when regulators + including and even especially the legislators who make the rules + identify with the regulated industry rather than citizens.

We have sought change in several areas:

Amendment of the Base Load Review Act (BLRA) that underlies V. C. Summer Project funding: We began our advocacy with this issue, and in 2018 the BLRA was successfully amended to prevent future uses of the Act and to clarify the meaning of the crucial term "prudency.".

We advocated for changes in the mission of the Office of Regulatory Staff (ORS) to remove the requirement that they represent economic development interests and the financial integrity of utilities and focus on representing the interest of ratepayers in having a stable reliable energy system at a reasonable cost. This and other improvements were made in 2018.

We continue to seek changes in the membership of the Public Service Commission (PSC), which should more strongly emphasize qualifications rather than regional representation. We also seek changes in the Public Utilities Review Committee (PURC), a legislative body that oversees the whole regulatory system by vetting candidates for the Executive Director of the Office of Regulatory Staff, the Public Service Commission, and the Public Service Authority (PSA) that governs Santee Cooper. PURC also conducts annual evaluations for these officers and conducts other studies as needed. The LWVSC believes that they should be prohibited from receiving income, gifts, or donations from regulated entities. We will continue to advocate for these changes.

We also seek changes in the regulatory process for greater accountability, in particular to enable the PSC to question and even reject elements of crucial utility planning documents, Integrated Resource Plans (IRPs). At present South Carolina has one of the weakest systems of any state with an IRP process.

A copy of our press release about the Stop the Blank Check Coalition can be foundhere.

The State and Post and Courier have featured extensive coverage of the V. C. Summer debacle and related issues.